A THEORY OF MONEY AND MARKETPLACES
This article considers an infinitely repeated economy with divisible fiat money. The economy has many marketplaces that agents choose to visit. In each marketplace, agents are randomly matched to trade goods. There exist a variety of stationary equilibria. In some equilibrium, each good is traded at...
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| Published in: | International economic review (Philadelphia) Vol. 46; no. 1; pp. 35 - 59 |
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| Main Authors: | , |
| Format: | Journal Article |
| Language: | English |
| Published: |
350 Main Street , Malden , MA 02148 , USA , and 9600 Garsington Road , Oxford OX4 2DQ , UK
Blackwell Publishing, Inc
01-02-2005
Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association Blackwell Publishing Ltd |
| Subjects: | |
| Online Access: | Get full text |
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| Summary: | This article considers an infinitely repeated economy with divisible fiat money. The economy has many marketplaces that agents choose to visit. In each marketplace, agents are randomly matched to trade goods. There exist a variety of stationary equilibria. In some equilibrium, each good is traded at a single price, whereas in another, every good is traded at two different prices. There is a continuum of such equilibria, which differ from each other in price and welfare levels. However, it is shown that only the efficient single-price equilibrium is evolutionarily stable. |
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| Bibliography: | ArticleID:IERE309 istex:0465A1680928107C9CC608BB8E504F48246B9CFE ark:/67375/WNG-D8CCS8WD-8 Manuscript received July 2003; revised November 2003. ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23 |
| ISSN: | 0020-6598 1468-2354 |
| DOI: | 10.1111/j.0020-6598.2005.00309.x |